Devine says rents for prime-quality office accommodation in Geelong have doubled in the past eight years in line with the low vacancy rate.

Opteon says Geelong has the lowest vacancy rate at 5.5%, ahead of Newcastle in NSW and the Gold Coast, which recorded figures of 11.5% and 24% respectively.

Opteon research manager Richard Jenkins predicts Geelong’s total office market will outgrow Newcastle within two years.

Newcastle’s future lies in the hands of mining magnate Nathan Tinkler, who recently acquired an 18,000 square metre development site in the town’s CBD. The site has the potential to redefine the city centre and is suitable for retail, office and residential use.

In comparison, Gold Coast rental growth has reversed, with the market still grappling with a massive oversupply.

Stewart Gilchrist, Gold Coast director of Colliers International, says: “Now is one of the most advantageous times for tenants to relocate.”

“Rents have probably come back by around 20% on their face value and incentives are now at 20% to 30%,” he says.

Meanwhile, Jenkins says the Geelong CBD retail market is also undergoing an evolution, with the development of a number of specialised areas, including a dedicated food and entertainment precinct.

“Despite new shops being added, the vacancy is expected to continue to decrease in the CBD over the next 12 to 18 months,” Jenkins says.

“More national tenants are likely to be attracted to the Geelong market, encouraged by an increasing population and changing demographics in the region.”

A significant portion of the vacancy in the Geelong CBD resides in old-fashioned spaces. Jenkins says these are no longer attractive to large retailers, opening the doors for smaller businesses.

A recent report by ANZ reveals small businesses in regional areas are performing better than their metropolitan counterparts, confirming there are in fact opportunities for new business to establish themselves in regional towns.

According to ANZ, regional and rural small business sales were up 1.9% over the year ended in April, while city-based small businesses experienced a decline of 0.1%.

According to Ivan Colhoun, ANZ head of Australian economics, higher house prices in cities mean larger mortgage payments, leaving less money for things like dining out.

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